MercadoLibre, Inc. (MELI)

MercadoLibre reported second-quarter 2026 net revenues and financial income of $10,169 million on 5 August, up 50 percent from a year earlier 3. Income from operations fell 17 percent to $683 million, a 6.7 percent margin, and net income was $466 million 3.

The question the next report answers is whether the reinvestment of Brazilian margin keeps buying the engagement the company reports 3. The shareholder letter calls engagement the best leading indicator of the durability of its investments 3.

Management said it sets the dial to prioritize long-term value creation over short-term profitability 3. In Brazil, discounts for buyers who pay with PIX and lower fees for some sellers cut revenue 3.

Currency moves helped the headline: growth in dollars was 59 percent in Brazil and 55 percent in Mexico, against 43 percent on a currency-neutral basis for the whole company 3. The credit book passed $16 billion, up 75 percent from a year earlier 3.

On 9 September the company sold $1,000 million of 5.850 percent senior notes due 2036, rated BBB- by S&P, and said the proceeds are for general corporate purposes 4.

MercadoLibre said on 29 October that it intends to release its third-quarter results on 4 November, after the close of this coverage's record 8.

MercadoLibre was founded in 1999 and listed on Nasdaq after an initial public offering in 2007 4. The annual report traces its culture to early days in a garage in Buenos Aires 1.

Mercado Pago began as a way to move money safely between buyers and sellers on the marketplace 1. It then spread to payments outside the marketplace, and to card readers and QR codes for shops, because many retail sales in the region were still settled in cash 1.

Since 2019 the company has lent to repeat consumer borrowers for purchases outside its platform 1. It launched the Mercado Pago credit card in Brazil in 2021, then Mexico in 2023 and Argentina in 2025 1.

A crypto feature reached Brazil in 2021, Mexico in 2022 and Chile in 2023 1. The company launched Meli Dólar, a stablecoin pegged to the US dollar, in Brazil, Mexico and Chile in 2024 and 2025 1.

The company introduced free shipping in 2016 and, in its latest shareholder letter, said it made the same call again when it lowered the free shipping threshold in Brazil in June 2025 3.

Net revenues and financial income, the 10-K's total of sales and fintech income, rose from $15,107 million in 2023 to $20,777 million in 2024 and $28,893 million in 2025 1. That is growth of 37.5 percent in 2024 and 39.1 percent in 2025 1.

Commerce revenue grew 34.0 percent to $16,294 million in 2025 1. The 10-K ties this mainly to a 26.4 percent rise in gross merchandise volume, the value of goods sold on the marketplace, and higher flat fees on low-value sales 1.

Fintech revenue grew 46.2 percent to $12,599 million 1. Credit revenue rose $2,258 million on higher loan originations, and payment fees rose with a 41.3 percent increase in total payment volume 1.

Income from operations rose from $2,207 million in 2023 to $2,631 million in 2024 and $3,201 million in 2025 1. Net income went from $987 million to $1,911 million and then $1,997 million 1.

Loan losses grew faster than revenue 1. The provision for doubtful accounts, money set aside for loans that may not be repaid, was $1,050 million in 2023, $1,858 million in 2024 and $3,091 million in 2025 1.

Argentina supplied 23.5 percent of revenue in 2023, 18.4 percent in 2024 and 20.6 percent in 2025, while Brazil supplied 51.8, 54.9 and 52.6 percent 1.

Quarter by quarter in 2025, revenue rose from $5,935 million in the first quarter to $8,759 million in the fourth, which the 10-K calls the strongest season of the year 1.

Mercado Shops, a storefront product, was folded into the marketplace as Mi Página and discontinued on 31 December 2025 1.

Marketplace and shipping

The Mercado Libre Marketplace is the leading online commerce platform in Latin America by gross merchandise volume and is present in 18 countries 1. Third-party sellers account for most of the volume, and first-party sales from its own inventory are under 10 percent of it 1.

In the second quarter of 2026 the marketplace moved $21.9 billion of goods, up 44 percent, across 795 million items sold 3. Unique buyers grew 26 percent in Commerce 3.

Mercado Envios, the logistics service, runs fulfillment centers that handle more than half of shipments, and thousands of partner drop-off stores called MELI Places 1.

Mercado Ads sells sponsored listings, product carousels, banners and video 1. The company said it passed a 10 percent share of Latin American digital advertising for the first time, with net revenue up 62 percent on a currency-neutral basis 3.

MELI+ is the loyalty program, and its subscribers were up 72 percent from a year earlier in the second quarter of 2026 3. In Brazil a tier called Meli+ Mega bundles streaming services such as Netflix, Disney+, HBO Max and Apple TV+ 1.

Mercado Play, an ad-supported video service, launched in 2023 and reached connected televisions in 2025 1.

Mercado Pago and credit

Mercado Pago operates in 8 countries and leads fintech companies by monthly users in Argentina, Chile and Mexico, and is second in Brazil 1. It reached 88 million monthly users in the second quarter of 2026, up 30 percent 3.

Payment volume in the quarter was $101 billion, up 56 percent, and money users keep with Mercado Pago reached $23 billion, up 68 percent 3.

The account also offers debit and prepaid cards, credit cards, loans, insurance, savings and investment products, and a crypto feature 1. Lending is offered in Argentina, Brazil, Mexico and Chile 1.

The credit book passed $16 billion, up 75 percent, and credit cards were 47 percent of it 3. The company issued 2.6 million new cards in the quarter, against 1.6 million a year earlier 3.

Contxto reported on 21 May 2024, from a Bloomberg interview, that Mercado Pago had started talks with Mexican authorities on a banking license, a process expected to take 12 to 24 months 10.

In Mexico the company operates under a fintech license known as IFPE, which allows services such as a wallet app 10.

Loans 15 to 90 days overdue were 7.0 percent of the portfolio and 4.6 percent of credit card balances, which the company calls near historic lows 3.

Countries, people and places

Brazil produced 52.6 percent of 2025 revenue, Mexico 22.4 percent, Argentina 20.6 percent and other countries 4.4 percent 1. Brazil revenue in the second quarter of 2026 was $5,530 million in Commerce and Fintech combined 2.

In Mexico the company said gross merchandise volume grew 26 percent on a currency-neutral basis despite a tax reform headwind, and in Argentina it grew 38 percent in a weak consumption climate 3.

The company had 123,670 employees at the end of 2025, 61,139 of them in Brazil and 34,336 in Mexico 1. Its technology and product staff numbered 20,347, up 11 percent 1.

The 2026 bonus program names Ariel Szarfsztejn as chief executive, Marcos Galperin as executive chairman, Osvaldo Giménez as fintech president, Daniel Rabinovich as technology and operations president, and Martin de los Santos as finance chief 5.

Its headquarters are in Montevideo, Uruguay, and its facilities total 5,983,378 square meters, almost all leased 1. Its data centers are in Virginia 1.

Rivals and open problems

The 10-K says competition has intensified as local players grow their e-commerce businesses and international players expand, mainly in Brazil and Mexico 1. In advertising it names large global companies as the dominant rivals 1.

NeoFeed, citing a BTG Pactual report, says Brazil's free-shipping threshold fell from R$79 to R$19 and that Shopee, Temu, AliExpress and Shein compete there 9.

BTG's analysts see Mercado Libre with a slight advantage over its main competitors, calling its ecosystem of shipping financed by scale, payments, credit and advertising a competitive differentiator 9.

The company had accrued $172 million for probable legal losses at 30 June 2026 and listed further actions with a possible loss of up to $622 million 2.

Memory chip prices raised the cost of card readers, which pressured margin in Mexico, the second-quarter letter says 3. Brazil's move to a dual VAT began in 2026 and runs a transition until 2033 1.

The umbrella, in words

The brands are the Mercado Libre Marketplace, the Mercado Pago fintech platform, the Mercado Envios logistics service, the Mercado Ads solution and Mercado Libre Classifieds 1. Classifieds charge placing fees only on vehicles, properties and services 1.

Six subsidiaries, among them Mercado Livre Brasil and MercadoLibre Chile, guarantee the 2036 notes under an agreed guarantee 74.

Exhibit 21 of the 10-K says all listed subsidiaries are wholly owned, directly or indirectly 11. They include Mercado Pago's payment institution and Mercado Crédito in Brazil, Kangu logistics in Brazil, and Mercado Pago Crypto in Chile 11.

The list also names Alice Biometrics in Spain and a Shenzhen consulting company in China 11.

Galperin Trust /SD and the group it reports with beneficially own 3,400,136 shares, about 6.70 percent of the common stock, according to its Schedule 13D/A 6.

Baillie Gifford & Co reported 3,233,259 shares, 6.38 percent, held for its advisory clients as of 31 March 2026 in a Schedule 13G/A 12.

Capital Research Global Investors, an investment adviser, reported 2,717,172 shares, 5.4 percent, as of 31 March 2026 in a Schedule 13G 13.

The executive chairman signs the 10-K as a director 1.

The company says it does not give earnings guidance in the traditional sense, preferring long-term decisions to short-term results 1.

In the second-quarter letter it said it will keep investing at the scale and pace the opportunity demands, calling the best yet to come for Mercado Libre and Latin America 3.

It expects credit card margins to strengthen as the new cohorts of cardholders mature, the same pattern it says it has seen before 3.

For acquiring, the card-reader and payments business, it sees significant growth potential in the in-store channel and says it is investing accordingly; it launched in-store in Uruguay in the second quarter 3.

In Mexico the company is widening supply into new categories, one example being pharmacy 3. It also integrated HBO Max video inventory into Mercado Ads, which it said raises the addressable video audience by around 50 percent 3.

The board set the goals of the 2026 bonus program on 31 March 2026: net revenues and financial income, income from operations, total payment volume and a competitive Net Promoter Score, a customer-loyalty survey measure 5.

It also adopted a 2026 Long Term Retention Program that pays cash annually to named officers and other senior managers 5.

The company said adjusted free cash flow was $214 million in the second quarter, after $441 million of capital spending and $2.1 billion put into its credit portfolio 3.

It said the proceeds of its new notes are for general corporate purposes and will strengthen its liquidity 4.

Finance chief Martín de los Santos said the pricing marks another step in the company's consolidation as a full investment grade issuer 4.

The company said its China fulfillment center, where thousands of sellers now operate, grew volume 170 percent from the prior quarter 3.

It introduced PIX discounts for buyers and lower seller fees in April and said the flywheel should keep supporting growth in Brazil 3.

It said AI investment grew roughly $80 million from a year earlier while product development fell from 8.4 percent of net revenue to 7.2 percent 3.

Brazil's tax reform brings a dual VAT in 2026, with a transition to 2033, which the 10-K lists among its tax risks 1.